Scrap Metal Dealers bill

Public Bill Committee, 12 September 2012.

Clause 15 - Review of Act

Joe Benton (Labour, Bootle)

I remind the Committee that with this we are discussing amendment 4, in clause 15, page 9, line 10, at end insert—

‘(d) assess the prevalence of the export of stolen scrap metal through UK ports in the years following the passage of the Act.’.

David Hanson (Labour, Delyn)

My hon. Friend the Member for Hyndburn (Graham Jones) was in mid-flow when we ceased our discussions last night and, in the hope that he joins us soon, I shall continue the debate and give the Minister a chance to respond.

Amendment 14 is a simple proposal to ensure that whatever review is produced by the Minister, it would be laid formally before both Houses of Parliament rather than published privately for the hon. Gentleman or for the hon. Member for Croydon South (Richard Ottaway), the promoter of the Bill, or placed on a Home Office website without our being informed. I want an assurance that either the current Scrap Metal Dealers Act 1964 allows the review to be published formally before both Houses of Parliament or that the Minister will set a second precedent two days running by accepting an Opposition amendment so that the review will be laid before both Houses of Parliament.

Jeremy Browne (Liberal Democrat, Taunton Deane)

The right hon. Gentleman is getting greedy.

David Hanson (Labour, Delyn)

One feast in seven and a half years of Opposition is hardly getting greedy.

I am pleased to see my hon. Friend the Member for Hyndburn, because I was given the task of speaking to his amendment 4. I know that he will want to speak to his amendment, but may I say that I support it and I hope that, if the Minister and the promoter of the Bill cannot accept the amendment, they could at least consider assessing the potential for the export of stolen scrap metal through United Kingdom ports currently and in the future. We discussed that in some detail on Second Reading. The prevalence of containers carrying stolen scrap metal abroad for recycling is a matter of anxiety.

The Bill covers only England and Wales, not Scotland or Northern Ireland. Indeed, as the hon. Member for Suffolk Coastal (Dr Coffey) described on Second Reading, there is the potential for scrap metal to be collected and legitimately exported through her own port in Felixstowe, which, in effect, subverts the measures under the Bill to provide regulation of the outlet for that scrap metal when it is recycled. If scrap metal were collected by dealers and exported to France, the Republic of Ireland or other European countries, the material could have been illicitly stolen, bought for scrap metal recycling and taken abroad.

I support the principle of my hon. Friend’s amendment. I hope that the Minister can reflect on it and, as part of his review of the 1964 Act, whether formally under the amendment or informally as part of the commitment, consider with the promoter of the Bill the omission of Scotland and Northern Ireland from the Bill and the potential for exporting material. As part of his report to Parliament, will the hon. Gentleman assess whether progress has been made in Scotland and Northern Ireland in respect of similar legislation and whether the export of stolen scrap metal through UK ports is a problem that needs to be addressed for the future.

Graham Jones (Labour, Hyndburn)

Most of what I want to say has been said by my right hon. Friend the Member for Delyn. I emphasise the point that the Bill could last 50 years—the current Act has lasted since 1964—and we do not know what challenges there may be in relation to the theft of metal. Metal theft will continue, although we hope that the Bill will significantly diminish it. However, it may be displaced into channels other than the scrap metal recycling industry covered by the Bill. I think that that is the point that my right hon. Friend was making.

Any continuing review, therefore, on amendments to legislation must consider scrap metal theft in its entirety, so that the Bill can be as effective as possible, if it is to be amended in future. It is important in that context to have a broader assessment and review umbrella. In future that will have a bearing on legislation, and help MPs to determine what amendments are needed. I will end my comments there, as I think they are fairly obvious and straightforward.

Jeremy Browne (Liberal Democrat, Taunton Deane)

Good morning, Mr Benton. I will not speak for long. The Government are sympathetic to the sentiments underlying both the amendments, but do not feel that they are necessary, in the first case, or appropriate to the Bill in the second.

Clause 15 meets the Government’s commitment to review all business regulation to ensure that it meets its intended objectives, and so that all unnecessary regulation can be identified and removed from the statute book if that is deemed necessary.

Clause 15(1)(b) requires that the conclusions of the report are to be published. The procedure set out by the Better Regulation Executive is that the report must be published as a Command Paper and laid before Parliament. Therefore, the clause already meets the requirement in amendment 14, which is thus unnecessary. The undertaking is in the Bill.

Amendment 4 would require the Secretary of State to review an issue that is outside the scope of the Bill, being incompatible with the precise focus intended by my hon. Friend the Member for Croydon South. The purpose of the review clause is to make sure that there is a continued need for the system of regulation contained in the Bill. The review is therefore limited to the provisions in the Bill and cannot deal with issues that are outside its confined scope.

We recognise, nevertheless, the importance of the problem posed by the export market, which the hon. Member for Hyndburn and others raised, and we do not seek to detract from its significance. To date, the Association of Chief Police Officers and the British Transport police have little intelligence to suggest the direct exportation of stolen metal. Instead, stolen metal is being laundered through rogue elements of the scrap metal industry before being exported.

The UK Border Force, police forces and Her Majesty’s Revenue and Customs are, however, undertaking work to tackle the export of stolen metal. They aim to understand the extent of the problem and are developing intelligence to deliver more focused policing.

We recognise that there are issues to be dealt with at certain points in the system and are enthusiastic about the work being done by the police and others to understand fully the extent of the problem and how it can most effectively be tackled. However, a review of that work is a separate issue, important though it is to the Bill. We would not want a review to be less effective because it did not focus on the prime purpose of the Bill.

Graham Jones (Labour, Hyndburn)

I am tempted to withdraw the amendment, but I want to press the Minister a little further. A cross-European organisation, Pol-PRIMETT, would contest the assertion that the stolen metal export market is insignificant or small. Its estimate of about 8 million tonnes is accepted by the British Transport police and others at all the engagements where those interested in dealing with metal theft meet. I have never heard that figure contested by anybody in the industry or in the police, including the British Transport police.

Export is clearly a problem. I am concerned—I want to press the Minister on this—that the review of the Act will have a big black hole in which there will be an absence of information around metal theft. Dealing with it within the confines of the Bill seems restrictive. For anybody reading the review, with the issue precluded from it, it will appear that there is not an issue. I accept that the Minister recognises that that is an issue and he is going to deal with it—I take him at his word—but does he not recognise—

Joe Benton (Labour, Bootle)

Order. That is a lengthy intervention. Perhaps at this juncture the Minister might like to reply.

Jeremy Browne (Liberal Democrat, Taunton Deane)

I was not making light of the issue—I know the hon. Gentleman did not say I was. The issue that everybody needs to understand better—the more work that is done in this area, the more we will understand it—is the degree to which stolen metal is exported directly or whether it is effectively laundered through domestic industry sites and then exported. Of course, if it is initially laundered through a domestic site, the provisions of the Bill should be the pinch point where we seek to stop that happening.

The Bill is about more effectively and more tightly regulating the scrap metal industry in England and Wales. It is not about seeking to understand the international scrap metal market more effectively, important though that is. That is clearly a parallel piece of work. The review is in five years’ time. I hope that the greater understanding that we seek to acquire about the nature of the export market might be brought forward and reviewed on a shorter time scale than envisaged for the review of the Bill as a whole, which is five years. If anything, I can assure the hon. Gentleman that we wish to attach even greater urgency to the task than he is asking us to do.

Graham Jones (Labour, Hyndburn)

I accept the point that the Minister is making. I think we are on the same page. However, I will point out that we have people who cut overhead power lines down—111,000 V, 250,000 V, and the latest is 400,000 V. The lines are being cut on site by experienced people who know precisely what they are doing. The metal is obviously taken away with mechanised equipment that is able to carry heavy loads. It is being put straight into containers. It is not going to scrap metal yards. It is going straight out to China as a bulk export. I just wanted to highlight that issue.

Jeremy Browne (Liberal Democrat, Taunton Deane)

I accept the points made by the hon. Gentleman. In my time as a Home Office Minister, I intend to try to do what I can to address the problem in its entirety, but in terms of the Bill we are keen that there is a reporting mechanism, as I said with regard to amendment 14. There will be a formal report to Parliament in any case, but we are keen that the report is on the precise content of what will be in the Act—the regulatory regime that applies in England and Wales—and will not have extra features beyond the precise scope of the Act.

We recognise the importance of the issue raised by the hon. Gentleman, but for the purposes of the reporting process, we would like the report to be contained to what is precisely in the Act, rather than being a more sprawling and wide-ranging process.

David Hanson (Labour, Delyn)

I beg to ask leave to withdraw the amendment.

Clause 16 - Repeals

Jeremy Browne (Liberal Democrat, Taunton Deane)

I beg to move amendment 38, in clause 16, page 9, line 24, at end insert—

‘(2) In Schedule 3 to the Regulatory Enforcement and Sanctions Act 2008 (enactments specified for the purposes of Part 1 of that Act), for “Scrap Metal Dealers Act 1964 (c. 69)” substitute “Scrap Metal Dealers Act 2012”.’.

This is a tidying-up exercise. Government amendment 38 seeks to correct an earlier omission whereby the Regulatory Enforcement and Sanctions Act 2008 was not included in the list of existing pieces of legislation that needed to be repealed or amended by the Bill. The 2008 Act, to which I have just referred, makes reference to the Scrap Metal Dealers Act 1964. The amendment would remove the reference to the 1964 Act and replace it with a reference to this Bill.

The Regulatory Enforcement and Sanctions Act 2008 is designed to provide more consistent enforcement of regulations across local authority boundaries, better co-ordination between local authorities and central Government, and more effective enforcement of regulations. The 1964 Act is referred to in the 2008 Act as one that should be considered for the purposes of the Act. People with a keen eye for such details have spotted this minor problem. I have brought it to the attention of the Committee, in the hope of speedy support of amendment 38.

David Hanson (Labour, Delyn)

This is a small comment, but I am afraid I cannot help myself. It is just habit. I raised the matter on Second Reading. I am slightly chiding the Home Office on the handling of the regulation of scrap metal dealers.

Clause 16(f) of the Bill sponsored by the hon. Member for Croydon South, with Home Office support, would repeal sections 145 to 147 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. That part of the Act was brought about by Home Office amendment earlier this year. That Act received Royal Assent only a few weeks before the Bill we are discussing received its Second Reading in the House of Commons. I am not even sure whether that part of that Act has been implemented. I believe it was not to be implemented until December this year.

There are lessons in the handling of this matter by the Home Office. We live in a bit of a bubble, but outside the bubble real people are planning their lives and businesses on the basis of legislation we pass. In January this year there was no effort to regulate scrap metal dealers, despite the fact that the Opposition pressed for it. My hon. Friend the Member for Hyndburn had a private Member’s Bill arguing for it and the Government resisted. The Government then brought forward amendments to a Bill that received Royal Assent.

Now in this Bill, only three months later, the Government, with the support of the hon. Member for Croydon South, aim to repeal part of an Act passed—following Government amendment—early this year. That is not a good way to legislate. I could not resist; I could not let the moment pass in which to say that this matters to people outside. It is great fun and games for us in here but people are planning their businesses, lives, regulations and preparing for what happens in December.

We do not know—with respect to the hon. Member for Croydon South—whether the Bill will complete its passage following consideration and comment by other Members of the House. There is still uncertainty around whether something passed only this year will be implemented in December. That is not a good way to legislate. It is worth placing on record this mishandling of the approach to this topic by the Government over the past nine months.

Jeremy Browne (Liberal Democrat, Taunton Deane)

With my long record at the Home Office, it falls to me to explain what happened. The right hon. Gentleman has placed an uncharitable interpretation on how events unfolded. Following representations from all political parties and our constituents, the Government recognised that this was a serious problem. There was an opportunity, by putting forward those amendments, to act speedily. We did not, at that stage, know that a Member would bring forward a private Member’s Bill that would deal with the problem more comprehensively than the amendments were able to do. If the Bill is enacted, those amendments will have proved to be an interim measure. Many people might regard them as a useful interim measure to be replaced by something even better and more comprehensive.

David Hanson (Labour, Delyn)

I recognise that the Minister was abroad on Government business at the time, but he will recall, if he reads Hansard, that we had tabled amendments along the lines of the Bill, but they were rejected by the Government during consideration of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

Jeremy Browne (Liberal Democrat, Taunton Deane)

It will not be the first time in my, albeit fairly short, experience of being a Member of Parliament that the Government have thought that their ability to craft a precise wording is superior to that of the Opposition.

The intention was to deal with the issue through legislation as speedily as possible. We are delighted that my hon. Friend the Member for Croydon South has promoted a Bill that the Home Office felt was so well drafted that it was able to support it, with a few modest amendments that I have brought to the Committee. That is why we feel that the initial actions can be superseded by this more comprehensive and superior Bill.

Clause 18 - “Carrying on business as a scrap metal dealer” and “scrap metal”

Jeremy Browne (Liberal Democrat, Taunton Deane)

I beg to move amendment 39, in clause 18, page 10, line 1, leave out ‘and’ and insert ‘or’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss the following:

Amendment 40, in clause 18, page 10, line 7, leave out ‘buying or’.

Amendment 41, in clause 18, page 10, line 8, leave out paragraph (a).

Amendment 42, in clause 18, page 10, line 10, leave out ‘(if at all)’.

Amendment 43, in clause 18, page 10, line 10, leave out ‘them’ and insert ‘articles’.

Amendment 44, in clause 18, page 10, line 33, leave out paragraph (c).

Amendment 45, in clause 18, page 10, line 35, leave out from ‘silver’ to the end.

Jeremy Browne (Liberal Democrat, Taunton Deane)

Thank you, Mr Benton, for giving me the opportunity to speak to the final string of amendments. There is a substantial number of Government amendments, so let me talk the Committee through them in turn.

Government amendments 39 to 45 seek to amend the definitions in the Bill of a scrap metal dealer and of scrap metal. The amendments follow discussions held between the Home Office and the British Metals Recycling Association since Second Reading.

Government amendments 39 to 43 relate to the definition of a scrap metal dealer. Amendment 39 will allow a scrap metal dealer either to buy or sell scrap metal, rather than requiring that they do both. The current wording was not felt to reflect sufficiently the reality for some people. Clause 18(3) outlines the businesses that are not to be considered as scrap metal dealers.

Amendments 40 and 41 make changes to the clause, principally to remove the reference to businesses buying scrap metal, so that any business that buys metal only as materials for manufacturing items should be considered a scrap metal dealer as well. The reason for that is the example of foundries, which purchase scrap metal and smelt it to make other products. Smelting removes all visible markers, including products such as SmartWater, which makes the metals impossible to trace. If the record-keeping requirements at the point of purchase are not kept, that would offer a loophole for the easy disposal of stolen metals, particularly metals with a low boiling point such as lead. The Government are concerned that that might be a loophole, and the amendments seek to close it. Including that sector in the definition will ensure that all its purchases are included in the conduct of business set by the Bill, thereby closing the loophole. Government amendments 42 and 43 are consequential amendments that will give effect to the change that I have just outlined.

Government amendment 44 will remove the exemption for the six platinum metals that currently fall outside the definition of scrap metal. Members will see them listed, and looking like a chemistry lesson, in the Bill. Those metals, exempted in the 1964 Act, have now risen in prominence in a number of different types of industrial equipment and machinery, and in catalytic converters. Thefts of items such as catalytic converters have risen considerably over the past few years, which we believe is a result of the attractiveness of their metals to the criminal. Those metals are now routinely purchased by the scrap metal sector in that format. They are therefore included, ensuring that their purchase is covered by the new standards of conduct. In summary, the previous decision to exempt them was seen to be out of line with some practices, so we have cast the net wider to include them. Government amendment 45 is a consequential amendment to give effect to amendment 44.

If the Committee accepts the amendments, gold and silver will be the only exempted metals not classified as scrap metal. The scrap metal industry does not commonly purchase those metals, which are more routinely purchased by specialist dealers to high street outlets and jewellers. The Government take the theft of gold seriously. Gold prices have risen considerably in recent years, and the incentives for criminals to steal gold have increased in line with the higher price.

Gold and silver do not fall within the commonly understood definition of scrap metal and are not metals dealt with by the industry that we—or, more precisely, the hon. Member for Croydon South—seek to regulate in the Bill. I do not wish the Committee to think that the Government are not concerned about the theft of silver and, in particular, gold. Other metals should be included because they fall within the commonly accepted definition of scrap metal applying to the industry, whereas gold and silver require separate attention.

Robin Walker (Conservative, Worcester)

In a Bill focused on scrap metal, it is right to leave aside gold theft, but I am sure that the Minister recognises that the south Asian community in particular, where people have a lot of gold in their houses, has been targeted in gold thefts. There is great concern about gold theft among people in my constituency and other places around the country. I have asked Home Office Ministers to keep a close eye on the situation to see whether a ban on cash payments for gold should be considered, and I ask him to bear that in mind. Although I accept that the Bill is not the right place to deal with such thefts, the Home Office should monitor and look into the problem closely.

Jeremy Browne (Liberal Democrat, Taunton Deane)

I am grateful for that extremely constructive intervention and I share the sentiments in it.

Let me make two brief concluding points. First, Members will note that clause 18(8) provides a delegated power to the Secretary of State to change the definition of scrap metal, if that is deemed to be a wise course of action. I do not envisage that it will be appropriate to bring extra metals within the scope of the Bill, but should it prove a sensible path to go down, in the judgement of the Secretary of State, the Bill provides for that to happen.

To address my hon. Friend the Member for Worcester’s intervention more precisely, there is a whole body of work that it might be more appropriate to discuss in greater detail in another forum. The police are working to put more rigorous mechanisms in place for transactions involving gold, including requirements to obtain names and addresses of customers, to verify identification, to ensure that customers are over 18, and so on. It might be more appropriate to have a wider discussion of the problem. The amendments will not change the situation relating to gold, but most people would not regard gold as scrap metal. We recognise the seriousness of the crime and seek to put in place measures to combat it, working with the police to make it harder to steal gold and to trade in stolen gold.

Chris Kelly (Conservative, Dudley South)

It is a pleasure to serve under your chairmanship, Mr Benton. The Minister began his remarks on the amendments to clause 18 by saying that the Home Office had rightly consulted the British Metals Recycling Association. I am pleased that the Home Office has done that, but there was early resistance from some directors and members of the BMRA to the need for legislation at all. I am glad that they have now fallen in line. I did some media early on this year, or late last year, with the chief executive of the BMRA, who at that point was against the need for this kind of legislation. I am glad that that line of thought has changed.

As my hon. Friend the Member for Worcester said, this is a necessary series of amendments to a provision on a crime that is doing huge damage in my constituency of Dudley South. I am pleased that we have made this progress through the Bill of my hon. Friend the Member for Croydon South. I am pleased that the BMRA has been consulted and is now in agreement with the aims and objectives of the Bill.

Richard Ottaway (Conservative, Croydon South)

I would simply add this to my hon. Friend’s remarks: having visited a number of scrap yards, I know that catalytic converters often make up a dedicated corner of the yard. Platinum is clearly being frequently traded through scrap metal yards now, so these amendments are thoroughly appropriate.

Clause 19 - Other definitions

Clause 20 - Extent, commencement and short title

David Hanson (Labour, Delyn)

I do not want to detain the Committee long, but I want to ask a question of the Minister, rather than the promoter of the Bill. Clause 20(1) extends the Bill to England and Wales—we recognise that this a legislative matter for England and Wales—but I am interested in what discussions the Home Office is having with the devolved Administrations in Scotland and Northern Ireland. It strikes me that there is a potential hole if similar legislation on scrap metal dealing sites is not being considered in Scotland and Northern Ireland. A collector’s licence could be issued in Northumberland, but the actual disposal could take place in Tayside, Glasgow or Edinburgh. A collectors licence could be issued on the island of Anglesey, but materials could be transported to Belfast. The elements of the Bill in, say, clauses 3, 4 and 2 do not apply to Scotland and Northern Ireland. I am interested in what discussions the Minister is having. Can he update the Committee on what progress is being made in Scotland and Northern Ireland with similar legislation, because there is a massive hole in the potential to tighten up this sector?

Secondly, while the Minister is considering that, will he also give some consideration to clause 20(2), which is about the date that the Secretary of State appoints for bringing the provisions into effect. I note from the notes on the clauses that that date is anticipated to be six months after Royal Assent. I would like an indication of when he expects that to be. In the event of the Bill receiving Royal Assent, what advice and guidance does he intend to issue to scrap metal dealers and others interested in this, and when?

Graham Jones (Labour, Hyndburn)

On Report, perhaps the Minister will consider whether, as part of the licence arrangement, particularly for those disposing of metal on the Scottish border, for example, there should be an indication by the licensee of the disposal areas if they are outside the Bill’s remit of England and Wales.

Jeremy Browne (Liberal Democrat, Taunton Deane)

I am grateful for the opportunity to speak to the clause. Both contributors to this brief discussion have raised important points in which the Committee will be interested, so it is good that I have a chance to address them. As the right hon. Member for Delyn said, the clause outlines the geographical extent of the Bill, and it applies only to England and Wales. This reflects the devolved nature of the policy area and mirrors the geographical extent of the Scrap Metal Dealers Act 1964, which the Bill seeks to replace, so this is not just a post-devolution settlement arrangement. Scotland regulates its scrap metal industry through the Civic Government (Scotland) Act 1982, and that regime differs from the existing and proposed regulation in England and Wales. We understand that the Scottish Government are considering whether any legislative changes are required, and we are in discussion with them about how they may wish to proceed to regulate the industry as effectively as possible. Metal recyclers in Northern Ireland are regulated through environmental regulation, namely the Waste Management Licensing Regulations (Northern Ireland) 2003. It has recently been announced that metal theft is a growing concern for the Northern Ireland Assembly, but we do not know what legislative measures, if any, it seeks to take. The Home Office will continue to provide information to the Administrations in Scotland and Northern Ireland on the progress being made in England and Wales, and seek to inform their debate so that we can have the most effective regime possible, but it is ultimately up to them to decide whether legislative changes are required.

As the right hon. Gentleman said, this clause, in addition to clause 17, will come into force on Royal Assent, and the Bill’s other provisions will be brought into force by means of commencement orders made by the Secretary of State through powers in the clause. It is anticipated that a period of at least six months will be required between Royal Assent and commencement to allow licensing authorities to put in place suitable infrastructure to meet the new demands. The Home Office will work with local authorities and the scrap metal industry to ensure the smooth and successful implementation of the new regime.

Schedule 1 - Further provision about licences

David Winnick (Labour, Walsall North)

When I spoke on Second Reading, I mentioned the financial difficulties that local authorities may well have in implementing the Act. I do not know whether there is any reason to repeat what I said yesterday, but as my hon. Friend the Member for Nottingham North is here, I state that I fully support the measure. As I said yesterday, even his remarks will not provoke me into any form of controversy—and I note where he is sitting today, as I did yesterday.

To come to the relevant point, as hon. Members will see, on page 14, the schedule says:

“An application must be accompanied by a fee set by the authority, which must not exceed the amount set out in, or determined by, regulations made by the Secretary of State.”

Although my amendment 17 to the schedule was not moved—I will not go into that—I hope that the Minister, who obviously was not the Minister present on Second Reading, will bear in mind local authorities’ strong feeling that a national cap is not really necessary, and that they should be able to set a fee at their discretion.

Jeremy Browne (Liberal Democrat, Taunton Deane)

I remind the hon. Gentleman that the Committee agreed yesterday to an amendment to remove the cap. Those fears have, I hope, been allayed by that decision.

David Winnick (Labour, Walsall North)

I am very pleased about that. This may have been referred to in my absence yesterday, but if there is a feeling that local authorities could abuse the position, the EU services directive makes it clear that local authorities have certain responsibilities, which include not charging a fee that would be considered exorbitant. I am pleased that action is being taken, because local authorities face a very harsh financial regime, for reasons that we all know. The flexibility that the Minister indicated there would be yesterday is to be welcomed.